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2 Copyright 2010 NorthPage Research LLC ! www.northpage.com

About this ReportTrading Partner Integration is a business-critical function for modern supply chains.

Through the tips in this report, executives and

managers will gain key insights into how

leading organizations successfully automate

and integrate trading partners while building

effective and efficient Trading Partner

Integration operations.

NorthPage Research produces independent

publications and online guides to help business

decision makers


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9 Tips for Trading Partner IntegrationSuccess

in Modern Supply Chains

" Run an Autonomous Trading Partner Integration Operation

" Make Transformation a Trading Partner Integration ForceMultiplier

" Ensure Data Quality throughout the Trading PartnerIntegration Operation

" Prepare for Increased Complexity and Dramatic Growth inTrading Partner Integration

" Do More with Less: Strive to Achieve Greater Levels ofTrading Partner Integration Efficiency and Productivity

" Provide Trading Partner Data for Customer, Supplier andOperational Optimization

" Create a Secure Trading Partner Integration Operation" Get and Keep Trading Partner Integration Stakeholders on

the Same Page

" Embrace Trading Partner Integration Standards andCompliance


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Run an Autonomous Trading Partner

Integration OperationWHY

The Trading Partner Integration (TPI) function represents a high value

service center and business-critical function. As business reliance on TPI

grows, so does the value of operating the TPI function as an autonomous

operation.

Committed TPI planning, resources and organizational frameworks allow

TPI operations to better implement best practices and quality control

mechanisms and optimize service levels for internal and external TradingPartner constituents.

Trading Partner Integration Constituents

Internal points of integration are of equal importance to external, requiring

the TPI function to proactively and formally handle and invest in internal

agreements, relationships and service levels.

Developing an autonomous TPI structure supports the growing trend to

create componentized internal supply chain functions.

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HOW

To optimize a Trading Partner Integration (TPI) operation, run it as a

well-defined business unit, department, or workgroup. The optimalstructure and degree of autonomy is dependent on the size and

structure of the parent company and the role and nature of the

Trading Partner Integration function within an organization.

Levels of TPI Autonomy

Regardless of the size or scope, the Trading Partner Integration

function should be operated as a well-defined entity. TPI-specificstrategies, budgets, plans and reporting mechanisms need to be

developed and refined.

Finding the right mix of responsibility, authority and autonomy for TPI

budgets, personnel and business objectives is essential. In many

organizations, TPI is funded by and run under IT or operational

departments. When operating within such business units, it is

essential to setup an efficient and effective organizational and

operating structure to set and meet key TPI service level targets and

strategic objectives.

Research or review best practices related to TPI methodologies

including Lean Integration and Integration Competency Centers.


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Make Transformation a Trading

Partner Integration Force MultiplierWHY

All Trading Partner Integration productivity, reliability and performance

results begin with transformation. Whether performed manually or

through automation, the transformative process of accurately receiving,

validating and transporting business critical transactional data represents

the intelligent core of the Trading Partner Integration function.

Transformation is the Intelligence in the Trading Partner IntegrationFunction

A transformation process extracts the data structure and data from a

source schema or file format and transforms the data into a desired

destination schema and file format. The transformation process typically

includes data normalization, field manipulations and processing

according to an organizations master data rules. In this process, the data

content is not changed.

The quality of an organizations TPI transformation capabilities relates

directly to its efficiency and accuracy, as well as the levels of internal and

external productivity and user satisfaction. Effective transformation allows

organizations to quickly integrate new business partners and achieve

drastic reductions in time and effort expended when defining new

transformation maps.

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TPI Transformation lies at the heart of optimized supply and demand

chains.

HOW Make it a high priority to invest in transformation methodologies,

processes, and technologies. Advance the TPI organizations ability to

accurately and reliably enable relationships and transactions through

intelligent transformation.

Benchmark and analyze TPI Transformation quality. Measuring at a

granular level the accuracy and completeness of each transformation

via tests and samples is essential.

Track and improve upon the ratio of automated to manual

transformations. For most TPI organizations, automation holds the

greatest potential for substantial gains in productivity, accuracy and

reliability. While it may be impractical to believe an organization can

reach transformation nirvana automatically transforming data from

any source and in any format it is imperative to look for opportunities

to do so and save time, money and resources through the highest

degree possible of automated transformation.

Evaluate, select and implement a single automated transformation

solution to gain economies of scale through common transformation

definitions, reuse across partners and partner types and TPI userproductivity.

Proactively measure the TPI operation throughput and transformation

capacity. Identify current and projected TPI bottlenecks.

Seek to empower business users to manage automated TPI

transformation processes without the hands-on involvement of IT

resources. Doing so will optimize TPI operations.

By design, prepare for and proactively handle unstructured, semi-

structured and structured data in the TPI operation. Learn and applythe distinct approaches and best practices related to handling

differences between these distinct data types.


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Ensure Data Quality throughout the

Trading Partner IntegrationOperation

WHY

Trading Partner Integration is a business critical source of data,

contributing to the efficient operation of critical supply chain and customer

processes.

As Trading Partner Integration changes data through the transformation

processes, stakeholders must understand the profound effect that TPIdata quality has upon the parent organizations Data Governance and

Master Data Management initiatives.

TPI operations are only as good as their data. And TPI data is only as

good as the TPI operations ability to cleanse, normalize and process the

data.

Trading Partner Integration Data Quality Objectives

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HOW

Early detection of data quality issues is the key.

o Identify bad data at the point of entry into the transformationprocess and automate the process of delivering error

feedback to the sender. This practice will result in the

creation of a process that delivers continuous TPI data

quality improvement.

oUse data quality sampling and testing as important tools and

early warning indicators.

o Identify the causes of TPI data quality problems including

broken or non-existent processes, ineffective quality control

and poor system design.

oTPI data quality symptoms and problems can be readily

identified. Addressing these problems requires a proactive

investment in the plans and resources needed to find them.

The primary cause of poor TPI data quality is the manual processing

of trading partner data. Remove manual steps wherever possible and

improve data quality.

Identify and update hand coded transformation interfaces to

eliminate errors and inefficiencies. Hardened, manually-codedinterfaces lack the ability to maintain transformations due to partner-

initiated changes to the data which obscure TPI process visibility.

Look for disconnected or limited-function systems and processes that

cause users to rekey the same data in different places.

Ask for help. Most organizations have ongoing Data Quality, Master

Data Management and Data Governance standards and initiatives.

Seek expert assistance to ensure high-quality TPI operations and

achieve the necessary levels of data trust.


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Apply data quality methodologies focused on the five dimensions of

data quality:

The Five Dimensions of Data Quality

Review levels of Data Quality and Data Management knowledge in

the TPI operation.

Look for opportunities to use industry standard codes and unitdefinitions, TPI-focused solutions and industry-specific TPI

methodologies.


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Prepare for Increased Complexity

and Dramatic Growth in TradingPartner Integration

WHY

Trading Partner Integration operations are experiencing dramatic growth.

Failing to prepare for increased TPI complexity and scale compromises

the successful operation of supply and demand chains resulting in

significant negative consequences for the organization.

Trading Partner Integration Complexity & Volume Drivers

Complexity

Demand-driven product strategies and increased reliance on Trading

Partner Integration

Supply chain globalization and geographic expansion

Government and trading partners compliance mandates

Increased business reliance on Trading Partner Integration

Increasing levels and degrees of Trading Partner sophistication

Improved Trading Partner Integration reliability and functionality in

support of new initiatives

Increased use of service-level guarantees and increasing levels of

service expectation

The integration of new systems, processes, data and partners

resulting from corporate acquisitions

Volume

Increasing numbers and types of partners

Increasing volumes of transactions handled

Increased types of information required to be exchanged

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Infrastructure

New trading platforms and standards

New communication methods and protocols

New industry standards

New data formats

Technology advances

Trading Partner Integration and Supply Chain security threats

HOW

Review the Trading Partner Integration function across the above-

listed areas.

Plan and resource the Trading Partner Integration function

aggressively.

Build the strongest-practical infrastructure, processes and resource-

base to enable trading partner growth.


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Do More with Less: Strive to Achieve

Greater Levels of Trading PartnerIntegration Efficiency and

Productivity

WHY

In the era of limited growth or shrinking IT and infrastructure budgets,

successful Trading Partner Integration operations must do more with

less. TPI operations also face increased demands including the

onboarding of additional partners, handling of new document types and

the supporting of new and more rigid service level agreements.

Disconnect: Trading Partner Integration Budgets and Volumes

Flat or shrinking TPI budgets battle transaction volume increases

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HOW

Improve the Trading Partner Integration function within budget

constraints through optimization. Conduct operational analyses to findefficiencies and savings. Eliminate unnecessary functions. There are

many drivers of Trading Partner Integration efficiency including:

oSimplification of the enrollment processes

o Implementation of online self-enrollment for new trading

partners

oThe promotion and rewarding of partners for self-

administered testing and compliance

o

Reductions of resources required to process paperworko Implementation of automated core TPI functions including

transformation

oReduction of expenses related to VAN and outsourcing

services through developing the ability to directly exchange

data with large partners using advanced protocols such as

AS2

o Identification and elimination of TPI bottlenecks and

inefficiencies including

# Manual processing

# Inefficient tools and processes

# Inability to scale trading partner onboarding

# Time- and resource-intensive troubleshooting

When facing TPI-specific budget reductions:

oRelate them directly to TPI effectiveness. Forecast the impact

of such cuts on key performance indicators.

oMake a case to executive management for additional TPI

resource investment by demonstrating Trading Partner

Integration as a business-critical function.

oLook for opportunities to recover and increase Trading

Partner Integration resources by pursuing budget, resource

and headcount contributions from internal constituents (e.g.,

IT, supply chain / operations).


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Provide Trading Partner Data forCustomer, Supplier and OperationalOptimization

WHY

The Trading Partner Integration function provides a unique and valuable

source of customer and supplier performance data that improves key

demand and supply chain partner analyses. TPI constituents, including

internal stakeholders and external trading partners, that aggressively

measure and share key TPI data elements reduce costs while enabling

greater levels of automation, data quality and productivity.

HOW

Work with internal stakeholders including procurement, supply

chain/operations, front office groups and external trading partners to

develop customer and supplier scoring systems. These systems enhance

fulfillment capabilities and end-to-end processes, move the organization

closer to perfect order attainment and sharpen vendor performance

analyses.

Trading Partner Scorecard Elements

To optimize demand and supply chains, track and share Trading Partnerperformance and compliance data with TPI constituents.

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Create a Secure Trading PartnerIntegration Operation

WHY

As a gateway to internal and external networks and systems, Trading

Partner Integration operations represent a target-rich environment for

hackers. With many moving parts and large numbers of diverse

constituents, modern TPI operations possess many potential security

vulnerabilities.

The information transported through and managed by TPI systems

represent a transactional and at-rest data goldmine for hackers. SecuringTPI environments is a critical business imperative necessary to avoid

costly disruptions to service, losses of data and disruptions to the supply

and demand chain operations.

HOW

Incorporate Trading Partner Integration Security within Policies,

Procedures and Systems

oConfigure TPI Systems to limit access and exposure

oHarden Trading Partner Integration entry and delivery

mechanisms

o Identify and protect critical processes and data elements

o Incorporate Trading Partner Integration security elements in

functional requirements

oPromote awareness, educate, and train personnel on Trading

Partner Integration security risks

oSelect secure TPI system componentsoProtect, monitor and audit all TPI systems

oTest for security vulnerabilities throughout the TPI

development, change and enhancement lifecycles

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Trading Partner Integration security risks and remedial strategies

should be identified and developed by:

oThe TPI system owner(s)

o IT security personnel

oSupply and demand chain stakeholders

oExternal IT security experts (optional)

oTPI technology component and service providers


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Get and Keep Trading Partner

Integration Stakeholders on theSame Page

WHY

The relationships that develop and flow through the TPI function

represent the functions lifeblood. Aligning priorities, plans, processes and

resources with key stakeholders is critical to the success of the TPI

operation.

Balance and Integrate Internal Trading Partner Relationships

HOW

Analyze the drivers of change in key TPI stakeholder relationships.

Forecast and plan with the full involvement of key stakeholders.

Proactively identify and remove resource, process, and throughput

bottlenecks in conjunction with the stakeholders.

Set up systems and processes to identify and communicate problems

- particularly at the points of intersection between the TPI

stakeholders.

Use service levels and scorecards as tools to quantify relationship

performance among the stakeholders.

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Introduce planned and event-driven communication between the TPI

operation and stakeholders.

Embrace Trading Partner Integration

Standards and Compliance

WHY

Standards represent an opportunity while compliance grows as a

requirement and reality for Trading Partner Integration operations. The

need for both is consistent with the increased realization that TPI is a

business-critical function.

The proactive use of standards in TPI provides businesses with the

opportunity to gain advantage in the growth of trading partner volumesand TPI complexity.

Compliance is a multi-level and multi-directional framework that ensures

the TPI function is compliant while ensuring Trading Partners maintain

compliance. When used properly, compliance provides an effective

discipline for the development and evolution of successful TPI operations.

HOW

Standards implementation and compliance adherence is a journey,

not a destination. Start small with an internal focus.

Alignment is the key. Design standards usage and compliance into

systems and processes.

Standards usage and compliance is typically led by operational users

and groups within the supply chain organization.

Standards, Regulation and Compliance Drivers

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WORKS CITED

Andreas Wechselberger, STI Innsbruck. B2B Integration Concepts.

Thomas Kluckner, Florian Haider, Biomed Central. B2B Integration ModelingMethodology. < http://www.sti-innsbruck.at/fileadmin/documents/teaching_archive/b2b05/B2B%20Integration%20-%20Modeling%20Methodology.ppt >

Roy Hayward, The Integration Engineer. BooknetCanada: Real Life Standardsand Usage Spec. < http://www.theintegrationengineer.com/booknetcanada-real-life-standards-and-usage-spec/>

Roland Dachs, Crown Europe. 2009. The Future Supply Chain.

Leslie Hand, Ahold. 2006. Measuring Data Quality.

Michael Flaherty, Government of Canada, Organization. 2010. The Canada U.S. Trade Relationship.

Mickey North Rizza, AMR Research . Electronic Integration Promises Retail

Trading Partners Big Bang for their Buck.

Richard Y. Wang, Yng-Yuh Richard Wang, Elizabeth M. Pierce, Stuart E.Madnick, Craig W. Fisher. 2005. Information Quality. M.E. Sharpe.

Dimitris Folinas, Maro Vlachopoulou and Vicky Manthou, University ofMacedonia, Marianna Sigala, University of the Aegean. 2004. E-volution of aSupply Chain: Cases and Best Practices.

Dr. Archie Lockamy, Samford University and Dr. Kevin McCormack, DRKResearch and Consulting LLC. Supply Chain Event Management Best PracticeModels.


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Marianne Swanson, Nadya Bartol, and Rama Moorthy, National Institute ofStandards and Technology, US Department of Commerce. June 2010. PilotingSupply Chain Risk Management Practices for Federal Information Systems.

Dr. Ir. J.G.A.J. van der Vorst,.2004. Supply Chain Management: Theory andPractices.

Marcel Bijlsma and Johan Koolwaaij, Telematica Instituut. 2001. B2BIntegration: The Playing Field.

Efraim Turban, Jae K. Lee, David King, and Ting Peng Liang, 2010. B2B E-Commerce: Selling and Buying in Private E-Markets. Electronic Commerce2010. Prentice Hall

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